How Poor Are Singaporeans: Monthly Household Income vs Household Expenditure

Do you know where you stand among fellow Singaporeans in terms of household income?

Now, go on and sum up the income of all the income earners in your household, does it give you more than S$8,846 per month? If it does, congratulations, you are better off than 50% of Singaporean household! But, have you ever compared your income to Singapore’s cost of living?

Key Takeaways:

At least 20% of Singaporeans are earning less than their monthly expenditure 🙁

Singaporean’s households spend an average of S$4,839 per month.

Two ways to do better for household finances: Pegging your expenses in the various category to Singaporean’s household average, and finding the right investment.

Further Reading: Singaporean’s household spending

Household expenditure of Singaporeans differs with age, with the age range of 30-39 years old spending the most.

That includes day-to-day expenses on items such as food, bus/MRT fares and clothing. Regular expenditure such as utilities, phone bills and school fees, as well as items such as holidays and hospitalisation bills are included too.

Household spending now should be around S$4,839 due to inflation.

The Scary Truth – At least 20% of Singaporeans are earning less than their monthly expenditure

It may appear that Singaporeans are doing well, but breaking this down even further, here’s what we realised:

The lower 20% earners in Singapore’s income is less than their monthly expenditure.

The difference in monthly household expenditure between the top 20% earners and the bottom 20% is about S$5,467.

For the higher income, their monthly expenditure is not even 1/3 of their monthly household income, which means they will only get richer with each passing month.

The lower 20% Singaporean earners face a high chance of getting stuck in this cycle with no extra cash to pull themselves out of the poverty cycle. Their never-ending cycle with debt will only add on to their financial burden each money. This is how real Singapore’s poverty situation can get for the lower income.

As for Singaporeans households that are on the 41st – 60th quintile and above, their income sits on a very comfortable level.

41st – 60th quintile: Income exceeds expenditure by S$3,768

61st – 80th quintile: Income exceeds expenditure by S$6,842

Above 80th quintile: Income exceeds expenditure by S$17,389

This further enhances the point that the rich will only get richer.

How we can do better – breaking that usual cycle?

If you find your household spending more than the average, maybe it’s time to watch your expenses.

Two ways Singaporean are stretching their household expenditure: spending on necessary item (expenditure fats) and spending on a wrong investment product

Breaking down our expenses: In search of household expenditure fats

The most immediate way to getting better with our household expenditure is to get rid of our expenditure fats. Below is a quick overview of average monthly household expenditure according to age range.

<30 years old

30-39 years old

40-49 years old

50-59 years old

>60 years old

Housing related expenses

$830

$888

$761

$595

$552

Food

$997

$1,235

$1,245

$1,280

$1,019

Transport

$573

$988

$990

$805

$538

Recreation

$398

$449

$443

$407

$307

Educational Services

$166

$279

$456

$383

$117

Health

$212

$271

$233

$268

$284

Communication

$191

$232

$243

$237

$159

Clothes & Foorwear

$140

$194

$175

$164

$103

Others (eg. Cigarettes, beer, manicure)

$513

$824

$808

$698

$505

If we translate the above information into bar charts, we noticed that the 3 main categories Singaporeans of all ages spend on are:

Housing

Food

Transport

Other than health, education and housing which might be subjective, one can take a look at the rest of his expenditure in terms of category every month to find out which area is he spending too much on.

Getting the right investment product that suits you

Your paycheque and savings account can only get you so far. Choosing the right investments should always be at the back of your mind.

13% of the insurance products sold in the first half of the year 2016 were investment-linked products. Out of which, some of these subscribers might be better off investing in the Singapore Savings Bond (SSB) should proper advice be given.

A percentage of Singaporeans might also be investing or trading instruments which they are not familiar with. While there’s no hard and fast rule to this, it is always good to read up more. Financial blogs content which is not sponsored will be a good way to start.

Check out our blog for more unbiased opinions on your personal finance journey.